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posted by FatPhil on Tuesday August 22 2017, @01:23PM   Printer-friendly
from the Philosophers-Stone dept.

"Although today high levels of inequality in the United States remain a pressing concern for a large swath of the population, monetary policy and credit expansion are rarely mentioned as a likely source of rising wealth and income inequality. [...]

The rise in income inequality over the past 30 years has to a significant extent been the product of monetary policies fueling a series of asset price bubbles. Whenever the market booms, the share of income going to those at the very top increases.[...]

[F]inancial institutions benefit disproportionately from money creation, since they can purchase more goods, services, and assets for still relatively low prices. This conclusion is backed by numerous empirical illustrations. For instance, the financial sector contributed massively to the growth of billionaire's wealth"

Source: https://mises.org/library/how-central-banking-increased-inequality

I'll leave my comments as comments, but note that The Mises Institute is proudly, one might say almost by definition, Austrian School. Both the Institute and the School have had their fair share of criticism. Which of course doesn't mean that individual author is wrong on this particular matter. -- Ed.(FP)


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  • (Score: 3, Insightful) by lentilla on Wednesday August 23 2017, @02:43PM

    by lentilla (1770) on Wednesday August 23 2017, @02:43PM (#558020)

    Of course it has changed the way you can make money! (Although perhaps not you, specifically.)

    A few years ago, I took a favourite pair of sandals to the local bootmaker and asked him to put a new pair of soles on them. Upon my return I admired his work and said "how much?" "Ninety dollars.", said the bootmaker. I really thought I had misheard him. I gave him his money and walked away feeling very sad - and I had just paid more to have the shoes re-soled than the original purchase price.

    The reason that I was sad was the realisation that the local bootmakers' days are numbered. Here's a man who is really good at fixing shoes. His conversation is limited, he's probably not the smartest or most adaptable on the planet, but he happens to good at fixing shoes. Nobody goes into the shoe repair business expecting to get rich. Unfortunately, he's got to eat, and he's got to pay rent - and I'd be entirely unsurprised if the rent on his tiny little alcove in the village shopping centre surpassed $1000 per week. Hence the extreme cost of a simple repair. As I said, this happened several years ago, and I haven't been back. I doubt I'm alone in this - increase the price of repairs to the point where people avoid coming to your shop - the consequence is you can't afford to run the shop and you go out of business.

    For most of human history, if you were passably good at (say) a trade, you hung up your shingle in the village and people would come to do business with you. Now, things are different. A lone bootmaker just can't compete, it's unlikely that he has the business acumen to "go online", and he's probably not good at much else than fixing shoes.

    So we won't have a local bootmaker for long. Bootmaking is a needed function in the village and now we will be deprived of that.

    There are a lot of folk like my local bootmaker - honest, simple and unassuming - but they hold their head up high in society (and rightfully so) because they contribute something useful and their needs are met. I fear we are growing a class of people that can't find a place for themselves in society, and also mourn the loss of their contributions.

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